A private-sector loan fund established in 2019 is supporting ambitious businesses in north east Scotland to achieve their growth plans, which will be vital to diversification and resilience in the wake of the economic shock delivered by COVID-19.
Opportunity North East (ONE) and the Andrew Salvesen Family Trust created the £2 million ONE Enterprise Fund to help SMEs to grow by providing funding for critical points in their growth. It is supporting investment by innovative businesses in new technology, manufacturing and production capacity, and jobs across the digital; energy; and food, drink and agriculture sectors.
The Fund has approved more than £500,000 of loans, and one of its first loan recipients has already repaid its funding. The Fund’s interest-free loans are repayable within five years. Recipients also benefit from engagement in ONE's business growth programmes and projects in the region. The Fund is evergreen with the amounts repaid becoming available for distribution in the future.
The Fund has also helped early-stage businesses to secure meaningful equity investment or achieve a significant commercial milestone.
The Fund’s loans support businesses with clear growth plans and address specific funding requirements which will enable the business to move forward at a critical stage in its growth. These requirements could include capital expenditure or working capital, commercially focussed innovation projects, export and internationalisation activity, or securing relevant skills and experience.
Representatives from the Andrew Salvesen Family Trust, ONE and other senior business leaders who understand the region’s industry landscape and growth opportunities sit on the Fund’s assessment panel. Loan applicants need to show they have strong leadership and commercial focus, established customers and well-defined routes to market, and profitability.
Patrick Machray OBE chairs the ONE Enterprise Fund’s assessment panel and is vice-chair of ONE. He said: “Aberdeen and Aberdeenshire have one of the most enterprising economies in the country. We are leveraging this strength – the quality of our business leaders and the growth potential of our SMEs – for economic recovery and for long-term growth and diversification.
“The ONE Enterprise Fund was born out of a shared ambition for ONE and the Andrew Salvesen Family Trust to support entrepreneurial business growth and employment. The economic shock of COVID-19 has underlined the need to accelerate growth in enterprising SMEs. In growing businesses, there are points when funding can be difficult to secure or where funds are needed to leverage more investment – these are examples of where our Fund is making a difference. The positive response from businesses and investors demonstrates that it is meeting a funding need and supporting the goals of businesses and the regional economy.
“The Fund is supporting businesses at key points in their development so that they get ahead faster and create jobs for the future, and that’s more important than ever,” said Mr Machray.
Patrick Machray OBE chairs the ONE Enterprise Fund assessment panel.North east Scotland has consistently been one of the most enterprising regions in the UK. The range of businesses that have received ONE Enterprise Fund loans reflects the breadth and long-term growth potential of the economy.
Recipients include a clean power developer for the oil and gas industry, a company pioneering on-street charging solutions for electric vehicles and an agritech business improving herd management for beef cattle.
EC-OG develops clean power technologies for the oil and gas industry. Its core technology in remote power generation and subsea energy storage has led to two innovative products – Subsea Power Hub and HALO. EC-OG identified an automated manufacturing process with the potential to improve its operating margin significantly. The ONE Enterprise Fund loan enabled the company to introduce the design and manufacturing enhancements, reduce the lead time for its HALO product, and meet its commercialisation plan timetable. EC-OG has subsequently fully repaid the loan.
Richard Knox, managing director of EC-OG, said: “The targeted support from the ONE Enterprise Fund made a significant improvement in our ability to deliver our system for the first commercial trials of our HALO energy storage technology. In addition, the ONE support has facilitated our ability to establish a new high-value manufacturing process for this clean energy technology in north east Scotland.”
Stonehaven based Trojan Energy has designed a novel system for electric vehicle on-street charging. The company had a short-term gap funding challenge, pending securing substantial investment to run a vital pilot study in London.
Ian Mackenzie, managing director of Trojan Energy, said: “The well-timed support from the ONE Enterprise Fund was transformative, helping us to bridge a funding gap and allowing the business to move forwards with our development plans and secure a large Innovate UK grant."
Aberdeenshire-based Herd Advance was established in 2018 by co-founders Murdoch Duncan and Jilly Grant. It develops innovative on-farm tech and systems to drive improvements in beef cattle herd management through greater efficiency, reducing carbon footprint and increasing profitability. Its first product is the Stockman herd solution. Stockman enables users to monitor livestock in real time and sort them automatically, effectively digitising their herd, driving growth performance, improving health, greatly increasing labour efficiency and worker health and safety. The ONE Enterprise Fund loan helped the business to secure its intellectual property, refine its prototype and move its technology towards commercial readiness.
Opportunity North East Ltd
11 Queens Gardens
Aberdeen
AB15 4YD